About this Show

Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

NETWORK

DURATION
01:00:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Virtual Ch. 58 (CNBC)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Oracle 25, Cyprus 17, S&p 13, Us 13, Europe 6, Larry Kantor 4, Cisco 4, Rick Santelli 3, U.s. 3, Brazil 3, Richard Anderson 3, Delta 3, Ge 3, Boeing 3, Washington 2, Scottrade 2, New York 2, Mexico 2, Michelle 2, Eric Marshall 2,
Borrow a DVD
of this show
  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    March 21, 2013
    3:00 - 4:00pm EDT  

3:00pm
♪ after all, what's the point of talking if you don't have something important to say? ♪
3:01pm
departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. march march madness is on with the first game of the ncaa tournament tipping off a couple of hours ago. if you were hoping for a flawless bracket, good luck. the odds of correctly picking all the inners, a perfect ncaa bracket is 9.2 quintillion. >> this, by the way, is a 1 with 18 zeros behind it and we have put every single one of those 18
3:02pm
zeros up here on the wall behind us. in the meantime, thank you for watching "street signs" everybody. >> "closing bell" with a big last hour of trading and the latest sfrom cyprus, coming up next. good luck in all your brackets, everybody. hi, everybody. we enter the final stretch. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. stocks are lower today heading into this final stretch. >> yes, they are, maria. >> down about 66 points on the dow. >> and that's off the lows of the day. the dow was down about 128 on the lows of the day. i'm bill griffeth. it is looking like a weekday for the markets. the situation in cyprus still capturing the imagination of the street. at one point, there was talk that one of the banks over there had enough cash to last them for a few hours if they didn't get a
3:03pm
bailout of some kind. that's what they're facing today. and s&p's retreating from that elusive all-time closing high at 1565. but as we are all well aware, a lot can happen in this final hour of trade. so stay tuned. >> absolutely. and if you think this is the start of a pullback, you need to stay tuned for what's ahead. 30 stock pickers with the name they said would ride out any correction and could even make you money while the rest of the market is dropping. >> get your pencil and paper ready for that. >> two exclusive interviews also ahead this hour. in a few minutes, delta airlines ceo richard anderson will be with us. that stock's been hitting a five-year high lately, it did again today, even in this down market. and then at 4:00 p.m. eastern time, fed critic and basketball fan, james grant will be here. even with ben bernanke's reassuring words of yesterday, we are having this sell-off. and jim grant of grant's interest rate observer will comment on that and a lot more. >> let's check where we stand as we approach this final hour. the dow jones industrial average
3:04pm
down by about 62 points. we are well off the lows of the afternoon. in fact, we've been coming off of the low about last 30 minutes or so. nasdaq composite also in the red today with a decline of about 26 points. quest technology has been a leadership on the upside in 2013. s&p 500 looks like this. also a decline there, as you can see, down about nine points on the standard & poor's. >> here we go. let's talk about it in today's "closing bell" exchange. with us, kimberly faust, at the big board with us today. jim lacamp from ubs. eric marshall from hodges capital management, and our own rick santelli. kimberly, you get to start first. you're one of those who feel this market is destined to go higher from here. why? >> i do. i think you've got a combination of low interest rates, you have inflation under control, and you have a ton of money on the sidelines. so i think that combination is rocket fuel to the stock market. >> but what about right now, where we see the markets up 10% year-to-date, we see these worries about what's going on in
3:05pm
europe. are there reasons to be that we might be able to get into this market at better levels and perhaps the correction happens before going much higher. >> i agree with that. i didn't say it was going to go straight up. this is going to be fraught with a little bit of turbulence as well if there. we've got it coming up, the debt ceiling in may, and 27th of this month, we are running out of money. we've got to extend that as well. so i think those are the opportunities where you actually have cash on the sidelines, get in. >> then there's jim lacamp. you say when the music stops, forget about looking for a chair to sit in, get out of the room altogether. why? >> there are a lot of things we have to worry about, bill and maria. this cyprus thing is going to set some really strange precedents for the rest of the periphery. what's going to happen when they re-open these banks? we don't know. are people going to pull all their money out? i think they will. that's going to spill over to spanish and portuguese banks. if you could take your money across the street and put it in a german bank, why in the heck would you leave it in a spanish bank, a greek bank, a cyprus bank?
3:06pm
you wouldn't. >> why would that push our stock market lower there, though? >> we have a stock market, bill, that's responding the to and improving global economy. everybody has thought, oh, europe is getting better. and the reason that they have is those credit spreads have gotten better. the european central bank have pushed those credit spreads down. the thesis has been that the global economy is getting better, but it's not getting were the. all of the economies in europe are deteriorating. japan is deteriorating. our market's moving higher because of money printing. once that -- once we get a spillover effect, some sort of a watershed moment in europe, you're going to want to take your assets off the table. >> well, that's a good point, but at this point, eric marshall, do you want to be takingoney off the table now? and if so, where do you put it? >> well, i think the important thing here, you know, stocks have been moving up over the last few months, really in response to improving corporate earnings. so i think you really have to
3:07pm
focus on individual company fundamentals. and at the hodges fund, we really see this as the golden age for active portfolio management. you know, over the last few years, investors have really been underweight equities, the money that has come in, has come into passive etfs. that's created a lot of high correlations in efficiencies in the market. and if you go in and really focus on what's going on in the underlying businesses that you invest in, you can find some opportunities to do some stock picking in this environment and that's really what people need to be doing prp. >> so you're going to want to buy what jim lacamp's selling, is that the idea? >> as long as there are proven fundamentals and an attractive valuation argument. >> all right. rick santelli -- >> now, wait a minute. the fundamentals aren't improving that much. we're seeing earnings start to deteriorate. and fedex and caterpillar, their earnings started to deteriorate. we're seeing some of those if you want fundamentals sl s slac. >> you can't just go blindly by,
3:08pm
you know, equities across the board. but there are opportunities to find pockets of the economy that are growing, despite all the negative and worries out there, as far as the macro environment. >> okay. but what about the fact that, you know, we were talking about this yesterday, bill, the s&p is expecting earnings growth, the s&p 500, of 0.7% for the first quarter. so we are looking at an earnings deterioration here. now, they're expecting things to pick up later on in the year. but if you're saying there is growth in the economy, but overall earnings are going to grow just 0.7%, is that priced into the market, or will this be a negative surprise? >> i really think that you have to go out there and you have to focus on individual companies. you can find pockets of growth within small and midcap stocks that aren't necessarily, you know, tied to what's going on with the macro environment out there. and that's where i think active portfolio management becomes more and more important in this type of vurenvironment. >> let's bring rick santelli
3:09pm
into this conversation. does cyprus matter to this market or not? we move them here or there and then it comes back again, depending on which investment you're talking about. >> i think it definitely matters. and i think, you know, remember that old saying, you know, americans play monopoly, the russians play chess. when you get involved in these issues and the russians are on the other side of the table, maybe from germany or brussels, however you want to put it, i do think that there is a possible tipping point here, with regard to banks. and i think this is important to pay attention to. like greece, i don't think it's necessarily catastrophic, but i think it's an important issue to pay attention to. and i think it's one of the reasons that we are almost at three-ar three-year wides on the boone, the safe harbor in that region, versus our ten-year rates. the current difference in the favor of our tenure is now 56 basis points. so i think that really kind of sums it up. and i think that could widen more. and about the flows our first guest was talking about, you know, that's why we flirted with
3:10pm
negative yields and things like a two-year note in germany, and in terms of bubblicious, you like bubblicious? look at a jgb tenure at 58 basis points. >> nice. >> kelly, when do you expect the bond market to really become competitive again with stocks? in other words, when are you expecting yields to start moving up? >> you know, i think we're going to start to see inflation start heating up maybe towards the end of this year. i'm not an economist, i'm not sure. but if the economy starts to heat up and job markets start to heat up, their going to start tighten the rates a little bit. so that's when we'll start to see bond rates go up. but in the meantime, i still keep them in the portfolio, for sure. >> so toward year end, would you start diversifying out of stocks and into fixed income or not? or stay in stocks? >> i'm an asset allocator. so i've got stocks and bonds at the same time. but we're tilted more towards value stocks at this time. >> give us an example of one.
3:11pm
if you're playing monopoly, which property are you going to build a hotel on? >> we like ge. ge is a great global play, we like at&t. >> how high can ge go? it's at 23. >> it's not so much of a growth play, it's an income play. >> yes, it has been. >> just saying. >> i'm being cautiously optimistic there. >> kimberly, good to see you. gentleman, thank you for joining us. >> all ten s&p sectors in the red. josh lipton looking at all the big movers and shakers right now. over to you, josh. >> that's right, maria. a broad move lower today, but also some pockets of green. let's start with oracle, deep in the red. your worst performer in the s&p 500 by a long shot. the software maker, pinning the blame on its sales force for a miss in third quarter software sales. the street reacting. rbc, stifel, and red bush all cutting their price targets.
3:12pm
jabil circuits a down some 28% in the last 12 months. now, jabil's largest customer, though, is apple, and they are a different story. traders telling me that, technically, that stock has been acting better. we had an initial move higher last week, held higher, digested those gains. traders want to see if we can take back 462 bucks, which is the 52-moving average. yahoo! moved higher today. analysts moved that to outperform. they assume ali baba will complete its ipo within the next 12 months, benefiting yahoo! as it has a 24% stake in the company. bmc software also enjoying some support. reuters is reporting that private equity firms are joining forces in the auction of bmc, making it more likely that the business software maker will be taken private. and we'll end here on aviv, the health care-focused reit began trading today under the ticker
3:13pm
aviv, that stock up about 2% right now. >> in the meantime, had a pretty good sell-off for a time, for a brief moment, the dow was down 128 points. well off those lows right now, down 61. the s&p falling ever-further away from an all-time closing high. >> it's amazing, bill, because every sell-off is met with a bay on the dip mentality. that's what we're seeing today as well. so if you're worried about a pullback, coming up, we've got three market experts here thabz that there are three stocks you need to know if we are, indeed, headed for a sell-off. >> and the ceo of delta airlines is making his way to the set. delta hitting another five-year high today, despite this lower market. we'll talk about that, his decision to buy an oil refinery, and some major changes to your sky miles frequent flyer program. that and much more coming up on this most important hour of the trading day. ♪
3:14pm
♪ i don't want any trouble. i don't want any trouble either. ♪ [ engine turns over ] you know you forgot to take your mask off, right?
3:15pm
[ siren wailing in distance ] ♪ [ male announcer ] introducing the all-new beetle convertible. now every day is a top-down day. that's the power of german engineeri
3:16pm
welcome welcome back. we have breaking news on cyprus right now. we want to get michelle caruso-cabrera. she's on the phone live from cyprus. what can you tell us? >> reporter: the head of the central bank of this country is
3:17pm
urging parliament to pass a new law that would give him the ability to wind down one of the troubled banks in this country. this is a signal of the solution that they're finally going to try to seek in terms of getting out of this crisis. right now, he doesn't have the authority to shut down one of the banks, which is pretty odd. most countries, the central bank does have the authority to shut down banks. they need that law passed so they can begin the process. that would be one of the conditions it would have to meet in order to get the bailout from the imf, the european union, and the ecb to prevent the financial collapse of the country on tuesday, when they try to reopen the banks. >> in terms of that one bank, what would be the ripple effects of closing down that one bank? >> reporter: well, it would save them a lot of money, because they don't have to recapitalize it, right? that's why the european union would laike it, because it woul reduce the bailout cost needs. at the same time, you can assume that a lot of employees are going to lose their jobs. there are about 2,000 people who work there. so it's going to hurt the people who work there, for sure. it's what we have seen
3:18pm
throughout the european crisis, as you try to implement measures that reduce costs. at the same time, it can lead to hits on the economy. >> right, of course. michelle, thanks very much. we'll check in again later as this continues to develop. michelle caruso-cabrera live tonight in cyprus. despite a pullback so far this week, in fact, we're having our worst week of the year, wouldn't you know, transportation stocks have been on fire for the year. one group in particular has seen a big resurgence. airlines, of all groups. take a look at the largest u.s.-based air carriers, all making big gains since the new year. delta has led the pack, hitting a five-year high again today. joining us in a cnbc exclusive here at the new york stock exchange, we're pleased to welcome delta's ceo, richard anderson. good to see you. >> good to see you. >> why are you guys shining now, as a group, in a struggling economy, when prices for your biggest expenditure, fuel, is going up? >> the industry has evolved very successfully over the past decade. we've had good consolidation in the industry, so we're at an
3:19pm
organizational construct, where the industry can continue to advance its returns on capital. >> you know, it's interesting. because a lot of capacity has been taken out of the sky, as you say, because of this consolidation. is there more capacity that needs to come out, do you think, or are we now at the right level, in terms of the number of players? >> well, i can speak about delta. delta plans on having its capacity about flat, year to year. and we vary that capacity based on fuel price and demand. and so i ink that's the most important thing, is getting the equation of demand and capacity right, to be able to recover fuel costs in our prices. >> now, you took the unusual step last year of buying a refinery not too far from here, as a matter of fact. why did you do that? and what would the impact be on your expenditures for fuel? >> jet crack spreads are the single largest increasing costs at delta over the last three years. so we pay anywhere from $20 to $40 a barrel in refining costs.
3:20pm
so it's really a simple vertical integration play, at a capital cost that's less than a brand-new 777. >> so here's my question. it sounds like such a smart thing to do for airlines. why haven't other airlines or other consumers of fuel that would come from a refinery like that, why don't they buy them? >> well, i think we had a unique opportunity, because this asset came on the market, it was a well-maintained asset, and we were able to buy it for about $160 million, the price of a wide-bodied airplane. and jet crack is your largest increasing cost. so it just made good sense. >> and good sense. you're reporting your first quarter profit in 13 years. the international air transport association increasing its industry profit forecast. let me get your take on what the strategy is, because you're apparently buying $6 billion in planes from boeing and airbus, is that right? >> well, no, we have currently on order a pretty significant order book with boeing on
3:21pm
737-900ers and with bombardier. >> so are you not worried about the boeing dreamliner issues? >> we are not exposed to the boeing dreamliner issues. we deferred our 787 order three years ago, out to '20/'21 with the right substitute for other airlines. so we mitigated that risk for delta. >> you did that because of the production problems? >> well, we are significantly delayed, so we were the number two carrier to order the airplane back in 2003. i actually ordered the airplane with alan mulally, and we made a decision because of the delays, we couldn't take anymore risk on the airline. >> would you order it today? would you take a 787 if you could? >> i would take a 787-1000 if it
3:22pm
were ready for production. but boeing will get this fixed. it's a well-run company. we're probably the largest operator of boeing airplanes today or one of the largest in the world and i have confidence they're going to get it fixed. and yes, i would. and if they won the competition with airbus against the a-350, i would place an order for a 787 at some point in the future. >> so you've got a lot of promising things on the horizon. what kind of a year in 2013 should investors suggest? and in terms of shareholder-friendly moves, what might investors be looking at in terms of dividends and buybacks? >> well, 2012, $1.6 billion in profit. the last four years, over $4 billion in free cash flow. we expect tomprove on that in 2013 and our board has undertaken a study that we're going to complete and announce by our share owner's meeting in june, concerning our long-term capital structure and how we might return cash to shareholders. >> is a dividend in the cards? >> well, i don't want to front run any decision. we have everything on the table
3:23pm
and we're listening hard to our buy side investors. we want delta to be the preeminent investment vehicle in the transportation sector for airlines. we have led the recovery of the industry, when you look at our market cap. our market cap is significantly higher than others. our stock is up over 40%. >> five-year high today. >> five-year high today. and we have a lot of momentum and we are not going to let our share owners down. >> having said that, though, that's your greatest obstacle right now? what keeps you up? is it the security issues, that sometimes keep people away from flying? is it the problems of business? is your business versus the leisure traveler mixture not where you want it to be? what is it that's bothering you right now? >> i think what concerns us the most is twofold. one is state-owned enterprises that compete with us internationally, which is a growing issue for many of the industries traded on the floor of the stock exchange here. our biggest competitor are governments that operate airlines. and the second thing is our government needs to solve the
3:24pm
sequester problem. >> got it. well, it's interesting that you bring this up, because this is obvious the issue that's front and center for so many corporations out there, that this dysfunction in washington. but in terms of your own investing, we talked off-camera a moment ago. you bought into a mexican company. where around the world, aside from the united states, are you seeing growth and where are you investing your money? >> we have big investments in mexico. we're an owner in aeromexico and have an exclusive partnership with them. mexico is a wonderful place to do business. balanced budgets, strong gdp, low unemployment. the second place is gal airlines in brazil, the largest domestic carrier in brazil. and we're in the process of buying 49% of virgin atlantic airways, to form a giant venture across the transatlantic. >> good to have you on the program. >> you're nice to have me.
3:25pm
appreciate it very much. >> richard anderson, ceo of delta airlines joining us today. we have some breaking news from scott cohn right now. scott, what do you have? >> bill, from our all in the family department, reagan rajaratnam, the 42-year-old younger brother of convicted inside trader raj rajaratnam has himself been indicted of insider trading. allegedly trading on inside tips provided by his brother, who is serving an 11-year prison term. he was heard on tape during those infamous undercover conversations. he is reportedly living in brazil, so will be subject to extradition. also a parallel civil suit filed by the s.e.c. back to you. >> thank you, scott. we've kept the conversation going here with richard anderson. >> talking about the strength of latin america and south america, which we're going to get more from him in just a second. the dow down 70 points, holding these levels with about
3:26pm
35 minutes left. >> and we saw oracle last night, having the biggest percentage decline in over a year on those disappointing numbers. is this sell-off an opportunity to buy back into an area that certainly has been a hot area for investors. oracle stock has been on fire. >> and then later -- >> this is not the car i ordered. i distinctly ordered the ant arctic blue super sports wagon. >> sports wagons versus minivans, you'll never guess who's winning these days. we'll get to that later on the "closing bell." acceler-rental.
3:27pm
at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car. it's just another way you'll be traveling at the speed of hertz. has an equally thrilling, lesser-known counterpart. conquer them with the exhilarating is 250. get great values on your favorite lexus models
3:28pm
during the command performance sales event. this is the pursuit of perfection. during the command performance (announcer) at scottrade, our clto make their money do more.re (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies."
3:29pm
well, we saw oracle report earnings last night. the stock, one of wall street's big losers today on that surprising sales decline. stock down 9.25%. jon fortt has the latest on oracle's disappointment, which really set the tone for the market today, jon. >> yeah, maria. the two most numbers in oracle's report are new software licenses and hardware sales. both were down year over year, 4% and 8%, when oracle had said they would be up. the reason oracle says the sales force, mostly new people, didn't close the deals by the end of the quarter. i made some calls and got some more color on this. it's important to know that oracle has had a sales managementship over the past several months, as keith block left. oracle is also trying to hire hundreds of new sales reps while training them to sell a lot of new hardware products. and finally, oracle is getting ready to upgrade some of that hardware, and just like with smartphones or tablets, some
3:30pm
customers will hold off buying until they can see what the new gear can do. so the big question is whether the sales force can come through in q4. their commissions are on the line, but oracle has had this trouble of selling hardware and software together for a while. not clear that they've fixed that now. around $17.5 billion, the magic number that analysts were expecting. we'll see if they can deliver something like that and beat their own range next quarter, guys. >> jon, thank you. so the question is, is this weakness in oracle a buying opportunity? let's start talking number. it's enis taner, good to see both of you guys. enis, what's the chart look like on oracle? >> oracle, the long-term chart, the five-year weekly is a case of double trouble. 36.50 was an important level, the high in may 2011. it got up there in the past month and failed again on this weak earnings number. support, long-term support coming in around the 200-week
3:31pm
moving average of 28, but shorter term at the one-year chart, the 200-day moving average is near term support at 32. i expect the stock to find some support down there like it did this morning, uh be i think it's dead money here. i don't see much of a bounce, i don't see much selling off. >> all right. dead money. steve, what about you? you worry about this sales stumble? >> bill, i really do. i will tell you, the way oracle talked about its sales force, i don't think that those folks today are playing hooky from work and watching the ncaa tournament. i think they're making a lot of calls today. >> you think? >> but i don't know that it's just oracle-specific. i think it might be broader and more about technology capex spending. if you look about a month ago, we saw the purer cloud plays, and oracle is struggling right now in the cloud, but the purer cloud plays, companies like rack space, they dipped down about a month ago. now we're seeing the bigger, older tech giants like oracle, like cisco, for instance, start to similarly trail off. i think it is a sign that the
3:32pm
global economy is weak, and companies, while they are very profitable, they are not reinvesting those profits into capex spending, whether it be in technology or elsewhere. so i think it's troubling for technology as a whole. >> wait a minute, are you guys agreeing with each other? >> i actually agree -- >> is that allowed? >> i agree with everything that steve just said, which is the first time it's happened on this show. and to steve's point, there's definitely a lot of corporate earnings that we're going to get in the next two months that are crucial, i think, not just for the tech sector specifically, but for the market as a whole. i think if you see more reports like this, that all-time high on the s&p might be stop resistance. >> very quickly, steve, what would get you to buy this stock? a price below this at some time or what? >> they also mention the dollar is a headwind, if the dollar were to turn around and get weak, i would be more interested in buying this kind of company, fedex, and oracle. >> appreciate your comments. >> we're in the final stretch of
3:33pm
trading for the day. a market under pressure, but well off the lows, down 54 points on the industrial average. >> up next, if you think the market is about to go through a correction, head lower, then you're about to get the three names our stock pickers say will protect your portfolio in a pullback. that's coming up. >> these are the names they say will go up, even if the market goes down. >> they will protect you in a pullback, yes. >> and there's jim grant, the founder and editor of grant's interstate observer and he's going to talk about what he's seeing for the federal reserve, and plus he's the got exclusive comments on what happens next in terms of fed policy. stay with us. tdd#: 1-800-345-2550 when i'm trading, i'm so into it, tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies, tdd#: 1-800-345-2550 spot patterns and find opportunities more easily.
3:34pm
tdd#: 1-800-345-2550 then, when i'm ready... act decisively. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 with the exact same tools, the exact same way. tdd#: 1-800-345-2550 and the reality is, with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 ...until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-800-578-4439 tdd#: 1-800-345-2550 and a trading specialist tdd#: 1-800-345-2550 will help you get started today.
3:35pm
[ chainsaw buzzing ] humans. sometimes, life trips us up. sometimes, we trip ourselves up. and although the mistakes may seem to just keep coming at you, so do the solutions. like multi-policy discounts from liberty mutual insurance. save up to 10% just for combining your auto and home insurance. call liberty mutual insurance at... to speak with an insurance expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. personalized coverage
3:36pm
and savings -- all the things humans need to make our world a little less imperfect. call... and ask about all the ways you could save. liberty mutual insurance -- responsibility. what's your policy? some fear some fear in the markets today. is this the beginning of a much-anticipated pullback? if that is the case, here's something that can help, perhaps. our next guests are here to give you their correction-proof stock picks. >> who doesn't want that? >> of course. >> peter sorrentino from huntington asset advisers. michael lasser from ubs, and chris constantinos from riverfront group. thanks for joining us. >> thanks, maria. >> peter, which stock would you own in a pullback? and would you buy more of that today? >> peter? >> absolutely.
3:37pm
exxonmobil is the name. four decades of outperformance. it's a boring story, but it's disciplined execution always wins. 6% annualized dividend increases over 30 years. if it gets cheaper, unless the rest of the world is willing to freeze to death in the dark, you want to own exxonmobil, because so far it's a product that none of us have figured out how to live without. it's best in the industry, chased by all its peers. they're typically ahead of the curve, stock has been weak, wouldn't mind buying it in here if the opportunity opened itself. >> michael lasser, what do you like? >> bill, i like home depot. you'otot to buy it here. three reasons, first, we're still in the early stages of the housing recovery. this company is going to see a ton of leverage, as the cycle unfolds. second, they're generously returning capital back to shareholders. they'll buy back 5% of their stock this year, raise their leverage ratio, so it's probably going to be higher than that. and third, here's the deep, dark secret. they're investing as they get this windfall. so what that's going to allow them to do is effectively manage
3:38pm
their p&l, such that they can grow earnings 15 to 20%, even as this housing tailwind slows. >> okay. >> all right. and that's a specific stock pick. that's not, necessarily, an industry play, correct? >> you got it, maria. that's absolutely right. home depot is a stock pick right now to own. >> chris, what about you? >> well, i like time warner a lot here, twx. i'm not sure i would go as far as to say i think it's going to go up if the market goes down, but historically, time warner hasn't been a high volatility stock, and i really like the capital allocation program they have right now, $4 billion share repurchase program, and they just raised the dividend 11%, a good free cash flow generator, and i think media is a good late cycle play here in general. not to mention, that i have had a couple recent misses in movies, i think they're due for a couple of hits, and they have "hangover iii" as well as the new "superman" movie coming out this year. i think they're due for a couple
3:39pm
of hits. >> we asked for a correction-proof stock, but you feel this is a late cycle thing. are we in late cycle in this recovery, do you think? >> the u.s. stock market is up well over 100% off the '09 lows. so i think to say you're in the second or third inning i think would be incorrect. but we at riverfront think the market still has plenty of upside from here over the next 18 to 24 months. we're a little bit more bullish overseas than we are in the u.s., but we think names that focus on dividend growth, like time warner, has 10 to 15% upside in the next 12 months. >> got it. so time warner, home depot, and exxonmobil from our three guys. thank you very much. >> thank you, gentleman. heading towards the close. holding here down 55 points on the dow industrials and the s&p is down about nine points. we're not going to get a new high there, either. >> bill, we should point out the transports today. yesterday, fedex was the big disaster de jure. it's down agained to, taking the transports lower again. 85 points lower.
3:40pm
we know that dow theory, transport, industrials, side by side. they were for a while in 2013, both going up. that has reversed. so does cyprus matter to the markets? it depends on who you ask. and what the news out of the country is, that tiny country. michelle caruso-cabrera is there. she has the latest as this market continues to swing on any news coming out of cyprus. and we're heading down to the farm to find out why you may soon lose your appetite when you see where your grocery bill may be headed. back in a moment. [ male announcer ] i've seen incredible things. otherworldly things.
3:41pm
but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car.
3:42pm
3:43pm
welcome back. the cyprus soap opera continuing. michelle caruso-cabrera has the latest on this developing story in cyprus. >> reporter: hey, there, maria. parliament is inside the building behind me, voting on some legislation. and that legislation has brought out hundreds of protesters who are here at the end of the street. they are not allowed to get any closer. they are the employees of a bank here in cyprus. they're not happy with what's in the legislation. here's what it is. the head of the central bank in this country has asked parliament to pass a law that will give him what's called resolution authority. that gives him the authority to do what's called resolving a bank. like all things that are unpleasant in life, we often
3:44pm
come up with euphemisms for them. so to resolve a bank is to take a bad bank, and what they're going to do in this case is split up this bad bank into a good bank and a bad bank. the good bank, the insured deposits, under $100,000, they're going to be moved over to another bank that will be left standing. then, they're going to take all the bad assets and they're going to start winding them down from the stub of what's left of this bank and sell them over time. the implications of this are twofold. it saves them a lot of money. it gets them a lot closer to that $5.8 billion that troika wants them to come up, when they originally, why don't you tax depositors. this reduces that. secondly, it also protects everybody under 100,000 euros. everybody in both banks stays protected underneath the insurance threshold. now, who's going to end up getting taxed, levied, taking a
3:45pm
haircut, anybody who's got over 100,000 euros in the account. they're going to probably suffer on-paper losses of 30 to 40%, maybe 50%. for that, they'll be given stakes in a new bank, in the new bank that will hopefully over time give them money or the wind-down of the assets of the old bank, the bad bank will pay them off over time. that's the situation. the employees are angry because they're worried they're going to lose their jobs. it's quite possible, because once you have two banks come together, what do you do? you get rid of branches, you have synergies in employment as the institution merges the together. the employees here are very, very angry about what they've heard. >> it's not the family. it's germany and other countries. they are not our friends. >> you want to leave the euro? >> yeah, of course. >> we are angry and sad because
3:46pm
we are thinking about tomorrow. >> reporter: it was coming to a crisis point. they had to do something, because all day long, there were already long lines at all the atms of bank, clearly word had gotten out that there were problems. now, what's also crucial about this, if they donate do this, with you know what happens on tuesday morning? it doesn't open at all. it goes bankrupt, bust, a lot more people lose their money. instead, if they do this resolution authority, the bank can reopen. it's like the fdic in the united states takes over a bank. guys, back to you. >> thanks very much. all those people, they want to get out of the euro, but they're not necessarily thinking about what it's going to look like when they're not part of this larger support system. >> i think they'll work it out. >> then, again, if this is the support system -- >> yeah, with friends like that -- >> maybe i'll take the other way. >> and there's those words, resolution authority that we remember from the '08 crisis.
3:47pm
now they're going through their own resolution authority crisis. >> what a development. meanwhile, this market is down 67 points on the dow jones industrial average. >> so is today's sell-off the start of the correction so many have been predicting? barclay's larry kantor is coming up on this. >> he's got a new report out today. later, a guest who is very bullish on a certain precious metal. >> i love gold! the look of it, the taste of it, the smell of it, the texture! >> no, it is not goldmember, it's dennis gartman. why he's protecting a big rotation from stocks into gold later on on the "closing bell." back in a moment.
3:48pm
how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
3:49pm
3:50pm
welcome welcome back, everybody. let's take a look at this market. we are worsening as we approach the close. the dow industrials now down 76 points. the worst-performing dow stock right now is cisco, down about 4%. of course, that on the heels of oracle, which is the worst-performing s&p 500 stock. that's down 10% on oracle. there's cisco, down 4%. that's going to drag down the dow, drag down the s&p. and that's exactly what we're seeing on the heels of the oracle news last night. down 9.5%, weaker than expected
3:51pm
sales numbers on oracle. meanwhile, barclay's is out with its global outlook report today. >> let's go straight to the man behind that report, larry kantor. and give us the headline. what's your theme right now for the global economy? >> we still like stocks over bonds, but we're getting nervous. >> because of evaluations? >> we've come so far, so fast. double-digit gains last year. we're almost up 10% this year, even after today. but we think -- so you're kind of set up for a correction. the other thing is how optimistic everybody is. everybody's jumped on the bandwagon, so we felt a lot better in december, when not everybody was with it. but i think if there's any correction, it's not going to be as big as the last few years. the fiscal fights are over in washington. less fear of double dip in the u.s. less worries about europe breaking up, cyprus notwithstanding, or china hardlining. so we would see it as a buying opportunity. >> so what do you want to do, then? should you be taking profits on some of those names you've made
3:52pm
money on already? how do you look at a market that you're still bullish on, but are getting a little nervous because of evaluations? >> i can't time this correction. >> right, you don't want to time it. >> so i stay in. and i'm going to buy, if you go down, okay? that's where i want to be. i'm not so optimistic in the second half of the year, though. because what worries me if stocks keep going up here, and it looks there's underlying momentum in the economy, i think the fed may look off side. >> we've got a lot of applause here right now. >> here's why. there are 25 members of the congressional medal of honor society. it's the highest award of valor in the military. so these 25 military, presumably all retired, recipients of the congressional medal of honor. and they're going to be ringing the closing bell today. and they always get a warm reception when they come to the floor of the new york stock exchange. >> that's what we're seeing right now with this live picture as they approach the podium to
3:53pm
ring this closing bell. >> are you expecting, larry kantor, a large sell-off? how big of a decline might we see? what's the catalyst? >> catalyst, i don't know. but i think you're talking about something, maybe it's the beginning now. i'm talking about something 5% or less, which is a lot smaller than what we've seen in the last few years. and that's why i want to buy on dips. i am worried about the second half. europe is still a mess, even though cyprus isn't going to be the thing, people are getting unhappy in europe. whether it's depositors, bond holders, citizens. look at italy. >> chairman bernanke mentioned this yesterday in his news conference, and it came up when the dow first hit its all-time high. he said, you know, in nominal terms, we're at all-time highs, but in real terms, we're nowhere close to that right now. is that what you're banking on? that we go, that we catch up with inflation, that the market's been lagging behind? >> that's part of it. so p.e.s, even though in nominal terms the market's back where it
3:54pm
was in '07, in p.e. terms, it's still cheap, and in inflation adjusted terms. but a bigger thing to me, lack where bond yields are today versus where they were. so in terms of stock yields versus bonds, it's a much bigger gap. so you still have some more to play for. but, boy, we've moved pretty fast. >> very quickly, let's say i want to sell some of the stocks that i made some money on. let's say like one stock up big, i made money, where am i going to put that money? cash? >> no way. cash and bonds are a loser in my view. stick with the u.s., japan, the uk, even spain. you know, the developed market stocks, not the emerging markets. you know, it's interesting, flows have been greater in the emerge markets than developed. they've underperformed for 2 1/2 years, and that will continue. because they were the early ones out of the gate in this recovery. stick with the developed markets. there's still some more room. >> larry, thank you very much. larry kantor, great stuff. we'll take a short break and we have the closing countdown right
3:55pm
after this break. >> also, it's slip pickings for home buyers with inventories at a 13-year low right now. but is that a bad thing, really? after all, that's helping to push home prices higher. we'll look at both sides of that issue, coming up. >> and nike minutes away from report earnings. instant analysis as soon as the numbers are released. you're watching the "closing bell" on cnbc, first in business worldwide. >> let's do it. investor. yeah, i'm a serious investor but i'm a busy guy. it used to be easier but now there are more choices than ever. i want to know exactly what i am investing in. i want to know exactly how much i'm paying. i want to use the same stuff the big guys use. find out why nine out of ten large professional investors choose ishares for their etfs.
3:56pm
ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. [ male announcer ] this is joe woods' first day of work.
3:57pm
and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him,
3:58pm
and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. four-minute mark right now. let's show you a few things. if you're just joining us, give you a quick recap. a down day for wall street today and a lot of the eyes were on cyprus, where at the low point, the dow was down 128 points, then it came roaring back all of a sudden. still trying to work things out sp . so the volatility you see there sort of reflects the scrambling that's going on right now as they try to resolve their banking crisis. the best performers in the dow today, there were some stocks that were higher. coca-cola and verizon, the two leaders. coke, there, up half a percent and verizon up a like amount, i
3:59pm
am told. there it is, also up half a percent. the big loser was cisco. and as you pointed out, maria, probably a reflection of what happened with oracle last night in those earnings. that's down 3.7%. oracle, itself, has been the worst performer among the s&p 500 stocks today, down about 10% today. >> we're keeping one eye on cyprus, but also keeping one eye on the earnings stories. oracle is one of the disasters we're seeing wi, down 9.5%. fedex is another one, which destroyed the transportation average and the bill rally we were seeing. is this a precursor to what we're going to see in a week and a half when the earnings begin rolling in? alan valdez is with us to talk more about the earnings picture. are you hearing concerns from clients in terms of cutting into the profit picture for the s&p 500, given what we're seeing from oracle and fedex? >> no question about it. and cyprus is one of the reasons because of the strong dollar now. we're seeing is a much stronger dollar, plays into those multi-nationals now, a strong dollar hurts them in the long run, helps us here in america,